The world’s largest animal products company needed our help. With a large and fragmented portfolio of 127,400 room nights in 112 destinations and only one internal decision maker, JBS needed a compilation and analysis of travel patterns, portfolio consolidation and a renewed focus on travelers’ needs. The JBS team chose HRS to take care of their 2016/2017 procurement program, with a brief to focus lodging negotiations with the most interesting hotels, enabling the firm’s travelers to enjoy safe and high-quality hotel stays.
JBS operates in 20 countries worldwide and serves over 300,000 customers from 150 countries. The group has 235,000 employees and a net revenue of over 170.3 billion reais (2016 figures).
Challenges and Objectives
The Brazilian project spanned hotels in 112 locations. The main objective was to reduce that portfolio in major destinations in the Americas based on consolidation and rate negotiation with the most important amenities for travelers.
After an initial verification, HRS found that the company worked with more than 800 hotels in these countries and the cost-reduction potential of selecting fewer hotels per destination and negotiating a larger volume in selected lodgings was huge. HRS compared this data with information from more than 3,000 multinational customers and 750,000 negotiated rates to build the procurement program and strategy and to have savings potential calculated.
How we Helped
With our focus on reducing suppliers and volume consolidation, HRS and this client achieved 13% in savings through hotel program negotiation, and when adjusting for inflation savings hit 14.5%. The number of hotels in the company’s portfolio was reduced to a quarter of those listed the previous year.
The newly negotiated rates included amenities more relevant to the company’s travelers, making accommodation options much more attractive and complete.
Decision by committee
The HRS RFP tool enables multiple decisionmakers’ opinions on each step of the selection process, but in this company’s case it was not necessary as they only had one decisionmaker for anything lodging related. Every hotel accepted on the program is extremely important for their travel management program, with high expectations riding on the services and customer care they offer. The company’s only decisionmaker was deeply involved in the process.
Be exclusive to cut costs
HRS uses the Best Buy Principle, based on comparing all rates available: negotiated rate; BAR (Best Available Rate); corporate discount (rates negotiated directly by HRS with hotels worldwide) – so that the best rate is always offered to the booker. This measure, combined with available preferential rates and discounted rates on top of the online booking tool search list, mean travelers can always make the best choice within their search guidelines.
It also promotes the more competitive offerings, all within the same platform, which brings greater control by the travel management team and consolidated data for use in the following year’s rate negotiations.
Three savings indicators
HRS uses three key elements to achieve the greatest potential savings and optimize the portfolio of hotels:
- Rate renegotiation (with the support of benchmark data)
- Consolidation of volume
- Use of alternative hotels that provide the same standard for a better rate.
The next step is to define a strategy to increase the adoption of HRS among a company’s travelers, ensuring that they make reservations through the chosen channel and have all the necessary information to make their booking safely and confidently.
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